Tesco, Sainsbury's and Ted Baker: an eCommerce update

It has been another busy week of retailer trading updates, with some of the leading players in the UK reporting results over the course of the last four days.

Ted Baker updated the market today (3 October), saying that retail sales for the 28 weeks to 10 August were up 30.2%, thanks largely to a 12.4% increase in selling space. ECommerce sales for the period were up 51.6% to £9.4 million, highlighting the continuing growth potential of digital retailing.

The fashion retailer also said that it will launch its new eCommerce platform for the UK during the second half of its financial year, which it hopes will drive multichannel opportunities and provide local content to the company's European customers. Ted Baker is expanding its store portfolio internationally, and the presence of geo-specific web offerings is seen as a vital part of the business's global multichannel strategy.

Neil Saunders, managing director of retail research group Conlumino, said he is confident about the retailer's future and he sees significant potential in its relatively young digital business.

"Looking forward, we are confident that the group has a firm grip on future product development," he explained.

"This gives it a solid foundation for continued expansion both on the international front and through eCommence, which remains a relatively small part of the business. As such, future growth prospects look rosy."

Earlier in the week, supermarket rivals Tesco and Sainsbury's released results showing sales levels moving in different directions, with the former reporting a half-year like-for-like sales decline of 0.9% in its core UK business and the latter seeing first half sales rise 1.5%.

The businesses are following different strategies, with Tesco focused on becoming a multichannel leader in the UK and growing its international operations, most notably through a new joint venture that has seen it gain a 20% share in leading Chinese food retailer China Resources. Sainsbury's, on the other hand, has put a strong focus on developing its convenience arm, which grew 20% year on year in the second quarter.

In terms of eCommerce development, Sainsbury's saw its online business grow by more than 15% year on year in the 16 weeks to 28 September and it announced on Monday that its online retail division is now worth £1 billion in annual sales. Tesco, meanwhile, noted that its online grocery home shopping business has now been rolled out to more than 50 cities overseas, and growth in all markets – including the UK – has reportedly been strong.

Retailers are learning that they should no longer view their different divisions in silo-format, but should instead find ways to operate on a multichannel level that ensures customers receive a joined-up experience whether they are buying online, on mobile or in-store.

Essential Retail understands, for example, that Sainsbury's Mobile Scan & Go trial is progressing well. The system allows customers to scan items as they shop using their iPhone or Android phone before letting them pay without unloading their trolley or basket at the till, and it is tools like these that are helping to increase shopping options for consumers.

Jon Rudoe, Sainsbury's director of online, digital & cross-channel, commented: "We're confident there is still a huge amount of potential for growth as our online grocery operation continues to complement our core supermarket business."